Family wealth keeping it in the family, 2nd edition

Table of Contents Praise ATTENTION CORPORATIONS Title Page Copyright Page Dedication Acknowledgements Introduction PART ONE - My Philosophy Chapter One - Long-Term Wealth Preservation as a Question of Family Governance I The Question II The Problem III The Theory IV The Solution V The Practice PART TWO - Family Practices Chapter Two - The Family Mission Statement Chapter Three - Ritual Chapter Four - The Family Balance Sheet and Family Income Statement The Family Balance Sheet The Income Statement Chapter Five - Investor Allocation Chapter Six - Two Important Practices Hat Work Grandchild/Grandparent Philanthropy Chapter Seven - The Family Bank Chapter Eight - Protectors, Advisers, Mentors, and Hommes d’Affaires Protectors Advisers Mentors Hommes d’Affaires PART THREE - Roles and Responsibilities Chapter Nine - Control Without Ownership Chapter Ten - Beneficiaries Chapter Eleven - Trustees Administration of the Trust Investment of the Trust Distribution of the Trust Chapter Twelve - Family Philanthropy Chapter Thirteen - Evaluating the Next Generation Chapter Fourteen - Peer Review Chapter Fifteen - The Private Trust Company PART FOUR - Reflections Chapter Sixteen - The Role of Aunts and Uncles Chapter Seventeen - The Art and Practice of Mentorship What Mentorship Is Not The Six Functions of a Mentor In Closing Chapter Eighteen - The Role of Elders Chapter Nineteen - The Trustee as Mentor In Conclusion Chapter Twenty - The Trustee as Regent Chapter Twenty-One - Unexpected Consequences of a Perpetual Trust The Law of Unexpected Consequences Society and the Perpetual Trust The Law of Entropy EPILOGUE BIBLIOGRAPHY INDEX About the Author About Bloomberg PRAISE FOR THIS EDITION OF Family Wealth—Keeping It in the Family: How Family Members and Their Advisers Preserve Human, Intellectual, and Financial Assets for Generations BY JAMES E HUGHES JR “Dr Maslow taught us that once we took care of the basics, we could concentrate on higher callings in our lives James Hughes teaches us that most families, once they have achieved the pinnacle of success, are faced with the threat of not preserving their wealth What can be done to break this unending cycle of rags to riches to rags? Any family member or adviser to them should read this landmark work We therefore give it to every family we educate, as a gift to them and their future generations.” —THOMAS R LIVERGOOD, CFP President, Family Office Management CEO and Founder, The Family Wealth Alliance “What is most transformational about Jay Hughes’s message in Family Wealth is his emphasis on the value of ‘human capital’ and his insight that within wealthy families, the real wealth lies in the individuals who make up the family, not in their balance sheet as it is conventionally understood The self-evident truth of Hughes’s analysis, borne out time and time again, should not be revelatory, but sadly, for too many families, those with wealth and those of more moderate means, it is Family Wealth is a brilliant case statement for the importance of the nurturing of character, of self-confidence, and of respect for the value of work This book broadens our understanding of the many different forms of capital, intellectual, emotional, and social It is a must read for all those who care deeply about their families.” —H PETER KAROFF Founder and Chairman, The Philanthropic Initiative, Inc “A very important work” —GEORGE D KINDER, CFP Author of The Seven Stages of Money Maturity Founder of the Kinder Institute of Life Planning “Family Wealth—Keeping It in the Family is a masterpiece No one is more astute than Jay Hughes about the topics of family wealth and family life.” —CHARLES W COLLIER Senior Philanthropic Adviser, Harvard University “Jay Hughes’s reflections have dramatically changed the way exceptional families view their assets His views on family governance, the family balance sheet, and control without ownership are essential reading for insightful families hoping to preserve their most important capital Jay’s contributions to the industry are immeasurable and much appreciated.” —SARA S HAMILTON Founder and CEO, Family Office Exchange, LLC “‘Those who not learn from history are doomed to repeat it.’ Jay Hughes, a passionate student of history, believes this more than most His work with families, including his own, gave him the gift of learning the history of many, many families Within that context he has written a book that illuminates previously only dimly lit concepts For example, how can grandparents be the catalyst for the next generation’s success? How should a family measure its own success as a family? Within IPI are many families indebted to Jay Hughes He has shared with them the history of families and even more importantly, a blueprint for their own family’s success.” —CHARLOTTE B BEYER Founder and CEO, Institute for Private Investors (IPI) “This is the best book on family wealth preservation yet written I would rate this book a ‘10’ on a scale of to 10 Jay Hughes helps people re-examine and redefine what their true family wealth is (hint: it’s not money) Well if it’s not the money, what is it, and how you use the money to define, protect, and grow true family wealth for generations to come? “That is the question Jay encourages families to explore and answer in this book Regardless of your level of financial wealth, if you desire to use your resources to plant and grow a healthy family and create an environment from which its members can thrive on their own, this is a great book for you.” —THOMAS C ROGERSON Senior Director of Wealth Management, Mellon Private Wealth Management “Jay Hughes has taken his classic on family wealth to a new level of maturity and relevancy It is a smart and sophisticated book offering both philosophical and practical insights on wealth stewardship The sections on mentors, elders, and other key family members expand upon sage advice from the original edition “Family Wealth is a must read for family members, their advisers, and all those interested in deepening their understanding of how the affluent family can grow and sustain its most important asset—the human lives of the family and their connection to each other “Family Wealth is, as was true of the original edition, an impressive piece of work that is a foundational resource for wealthy families as well as the professionals of wealth consultation.” —DR STEPHEN GOLDBART AND JOAN DIFURIA Co-Directors, Money, Meaning, & Choices Institute “Jay Hughes has given his distinguished career to the service of family legacy He takes an approach to wealth preservation that values not only money but people He shows us in Family Wealth—Keeping It in the Family why that approach matters and how it works for the family that wants a better future for itself and the world at large.” —PETER WHITE Managing Director, Family Advisory Practice, Citigroup Private Bank “All of us in the wealth management field have benefited by Jay Hughes’s return to advising families on the responsibilities of having money His unique background bridging law, religion, history, and philosophy provides a number of valuable anecdotes that are truly priceless lessons—not only for those who have money, but also for those who are servicing this sector in wealth management “Family Wealth—Keeping It in the Family is truly an ageless document that would have been as relevant in the 1820s as it will be in 2020 Mr Hughes’s writings and presentations have become the ‘bible’ in family governance and estate planning, spawning a number of disciples lecturing about his concepts of human, intellectual, and financial capital We thank Mr Hughes for his priceless gift of Family Wealth,which simplifies the understanding of the privilege of creating, inheriting, or owning money.” —TONY GUERNSEY President, Wilmington Trust FSB New York “Jay Hughes has been able to take his rich and extensive experience in the field of wealth preservation and distill it into an essential guide for the creation of legacy families Family Wealth provides family members and their advisory teams invaluable direction as they develop a strategic plan for utilizing wealth for the purpose of creating generations of successful, productive families.” —LEE HAUSNER, PH.D Author of Children of Paradise: Successful Parenting for Prosperous Families Partner of IFF Advisors, LLC “In this book, Mr Hughes literally brings to bear the wisdom of the ages in guiding the reader through the maze of stumbling blocks thwarting successful wealth preservation His focus is healthy and holistic, centered on the preeminence of the family’s human capital rather than the size of its coffers As such, it is not a how-to book for those looking to hoard their wealth To the contrary, this is an incredibly provocative, thoughtful (some might even say spiritual) guide Its chapters light the pathway toward the responsible shepherding both of the people and the assets that, when properly aligned, make up a family’s true ‘wealth.’ It is a must read for those we call patriarchs and matriarchs, their key intermediaries, all trustees and beneficiaries, and everyone who aspires to earn the title ‘trusted adviser.’ “We who have dedicated our careers to the responsible use and constructive redeployment of wealth are privileged to have someone of Jay’s caliber leading the way.” —MICHAEL J A SMITH Head of Wealth with Responsibility Program, U.S Private Wealth Management, Deutsche Bank ATTENTION CORPORATIONS This book is available for bulk purchase at special discount Special editions or chapter reprints can also be customized to specifications For information, please e-mail Bloomberg Press, press@bloomberg.com, Attention: Director of Special Markets, or phone 212-617-7966 ... message in Family Wealth is his emphasis on the value of ‘human capital’ and his insight that within wealthy families, the real wealth lies in the individuals who make up the family, not in their... Philanthropic Initiative, Inc “A very important work” —GEORGE D KINDER, CFP Author of The Seven Stages of Money Maturity Founder of the Kinder Institute of Life Planning Family Wealth Keeping It in the Family. .. preserve its wealth long into the future To those of you (pilgrims on the road to Compostella) who read the first edition of Family Wealth: Keeping It in the Family, welcome back to the journey